The State

If, as yesterday’s post argued, trade unions are no longer in a position to effectively counter-balance the power of capitalism, then some other site of power, some other institution, must play that role.  The contemporary right (the neoliberals, if we are going to use that terminology) demonizes trade unions at every turn.  The moral fury they direct against even the slightest hint of collective action on the part of workers has always baffled me.  Just what is morally wrong here?  Why is such collective action so reprehensible?  Other forms of collective action—political parties, lobbyists, trade and professional associations, the NRA and the AARP—are not anathematized, but trade unions are somehow beyond the pale.  I refuse to reduce this to sheer economic interest and bad faith; their moral outrage would be unsustainable if it didn’t somehow resonate beyond the quarters in which it directly serves economic interest.

Of course, the primary rhetorical move is to claim trade unions are an infringement on freedom.  Even workers who don’t endorse the union must pay their union dues.  A similar argument, of course, is made against the state—with taxes standing in as tyrannical in the way that union dues are.  The union and that state are both robbers.

The right’s commitment to undermining unions (which has a long and continuous history dating back to the 1870s) goes hand-in-hand with it more recent commitment to undermining the state.  And I think the right is absolutely correct to see the state, like the unions, as a potential danger to its deep commitment to economic inequality.  The state is a threat to profit insofar as everyone of its regulations—from labor law to environmental and public health measures—makes doing business more costly.

Despite the right’s (or neoliberalism’s) obvious desire to decrease the power of the state, the left has been much more lukewarm in its embrace of the state. [A side-note: yes, the American right wants to increase the power of the state when it comes to regulating private conduct and in matters relating to “national security.”  Capitalism—as the Marriott response to socially conservative legislation shows—has no particular sympathy for the issues that motivate conservative moralists. But the right is still the “party of order”; it does want a strong police force and military; it just doesn’t want any of that state power directed toward reining in money-making practices.)

While you would be very hard pressed to find a leftist who does not think unions are a good thing, attitudes toward the state are more ambivalent.  I don’t think the right is wrong when it identifies the state as a potential problem for the achievement of its ends.  The state is the only plausible (it seems to me) site of a power strong enough to combat capitalist power.  So why don’t leftists rally to the state’s support?

Let me try to count the ways.

  1. The insistence that the state has been entirely captured by the capitalists—and only serves their interests. This morphs into a necessitarian doctrine that such must always be the case.  The state will always be in cahoots with capitalism.  (The fallacy here is turning a contingency into a necessity.  Plus it would seem to encourage a fatalistic quietism; we are doubly screwed because political and economic power work hand-in-hand and it is useless to try to pry them apart.  My argument, finally, is that the chances of grabbing political power are, at the moment, better than the chances of grabbing economic power.  We have at least a fighting chance on the political battlefront, whereas the legal—and moral and habitual—protections afforded private property make wresting economic power away from the corporations and the wealthy much less likely.  It will take a political victory to begin to undermine the sources, structures, and institutions of economic power.)

 

  1. If #1 is a version of the left’s time-worn critique of “liberalism” and the “liberal state,” now we can entertain the anarchist suspicion of the state, most recently given voice in James Scott’s Against the Grain (Yale UP, 2017). The notion here is that all concentrations of power are inevitably bad.  My riposte is that, yes, power tends to accumulate—and that accumulations of power are generally not conducive to the general welfare.  But I don’t think there is any wishing away of power—or of its tendency to accumulate.  Thus, one needs to find ways to counterbalance powers (in the plural).  In a world in which economic power has concentrated on a scale perhaps unprecedented (the “perhaps” because, arguably, the Dutch and English East India companies of the 16th and 17th centuries were more powerful than Google and Apple today), to abandon the state as a possible counterweight seems suicidal.  There is certainly no reason to think Google is going to be more beneficent than a state—or more accountable.  To dismantle political power unilaterally in the face of economic power is to refuse to engage in the contest that we wish to win.  It is certainly deeply concerning that, as economic centers of power get larger and larger, political units get smaller and smaller (the break-up of Czechoslovakia and Yugoslavia, the possible break-ups of Britain and Spain).

 

  1. A harder to characterize, but no less real, general disillusionment with politics as dirty, corrupt, and indirect (taking so much time to effect such imperfect pieces of legislation and the cumbersome bureaucratic state action that follows legislative victories). I feel this way myself some 75% of the time.  One result of this sentiment is to turn one’s back on the state and get involved in “service” work.  We have seen a huge proliferation of “humanitarian organizations.”  These seem “clean” in a way politics is not—and also go out into the field and actually do the work of helping people.  The results—even if limited to a fairly small number of beneficiaries—are at least visible in the way that the beneficiaries of state policies rarely are.  (We see that the number of uninsured has gone down after the enactment of ObamaCare, but those are numbers not visible people).  Despairing of the state’s ability to deliver the goods, many leftists (especially among the young) have turned to non-state charity operations.  Letting the political, the state, off the hook in this way, not pressuring it to provide for its citizens, is a bad idea in my view—even though, as a personal choice about where to put one’s efforts, it seems to me more than easy to understand, to be a more appealing course to follow.

 

  1. The final position, which seems that of Hardt/Negri and some other recent writers, is that the state is a spent force, that it actually no longer has sufficient power to hem in economic power. We must mobilize another kind of power altogether if we are to bring neoliberalism to its knees—or even mitigate some of the suffering it inflicts.  Conspicuously absent from such views is any plausible agent of this force that will stop neoliberalism in its tracks.  Now, of course, an analysis of the state’s deficiencies need not present something to take the state’s place.  If I cannot walk with a broken leg, it does nothing to undermine the truth of my statement that I cannot walk if I do not consider alternatives to walking.  The argument that the state is powerless usually point to three factors: 1) capital flight in the age of globalization means the state cannot impose terms/regulations on capital because it will just move to jurisdictions that give it a better deal.  We are in a race to the bottom that the state is helpless to stop.  2) Even though the multinational and international organizations—like the GHO and GATT—and the international trade agreements—like the EU and NAFTA—are not particularly effective, they are constraining upon state actions, so power is leaking away from the national state; and 3) the blackmail and direct power of capital is such that most countries are now democracies in name only.  There is no path toward citizens getting the state to serve their interests as opposed to the interests of capital.  [This last point is a new version of the classic complaint that the state is just an agent of the capitalists.  It tends to come accompanied with the notion that the state, therefore, is at best useless and at worst another enemy that must be overcome in the larger fight against capitalism.  And the solution offered is usually the direct action of the populace, bypassing the state as its instrument, against the forces of capital.  Hence the recurrent dream of the general strike.  Refusal, non-compliance, civil disobedience on a grand scale.]

The main burden of this post, then, is that the left abandons the battle to capture the state—and to put its power to work advancing the left’s agenda and curtailing economic power—only at the risk of making a bad situation worse.  Despair about the state is really despair about the very possibility of democracy.  It can never be a government of, by, and for the people.  It will always be the instrument of the economic royalists.

To be concrete: what the state can do to rein in (at the very least) economic power is not a mystery.  Three strategies (all of which, I believe, are necessary) are in play.

  1. Interference (regulation and establishing the rules of the game) in productive and money-making operations themselves. This strategy covers everything from setting conditions of work, guarantees of employment and minimum compensation, worker’s rights, unemployment insurance, etc.  That is, various laws that alter distribution of effort, risk, and profit internal to capitalist procedures.  Protection of—nay, promotion of—union creation and activity.  These are all mechanisms to shift the distribution of market inputs and outcomes.

 

  1. Interference external (or after the fact) of market processes and outcomes. In a word, taxes.  Progressive taxation–including income, wealth and estate taxes—that work against the tendency of capital to accumulate in a few hands.  Similarly, stringent anti-trust laws to combat the tendency toward monopoly.

 

  1. Regulation of “externalities”(notably pollution) in the name of the public good, along with the positive provision of certain goods (transportation, health, parks, sanitation, public utilities, and education—I would add housing) that are not well handled by market processes. Here we get environmental regulations and public health measures, plus transit systems, municipal water and electricity, parks, libraries, schools etc.

 

All of this provides a suitably ambitious agenda for a left that intends to capture the state to serve its vision of the public good—a good that necessarily entails limiting the power of markets to determine either public or individual fates.

 

Two issues remain.

 

  1. Must we reconcile ourselves to the existence of markets? Not only are there factions on the left that want to ignore or dismantle the state, there are also factions who declare any tolerance for markets apostasy. I think a regulated market is preferable to any of the alternatives currently on offer (and I mean on offer theoretically as well as in reality.) I would love to be convinced otherwise, to be shown a model of a non-market society that seemed to me both plausible and desirable. Until then, I am going with regulated markets.

 

  1. The big question. Can the state actually counterbalance the power of capital?  If capital is mobile precisely where the state it tied to a territory and most citizens are immobile due to legalities of citizenship and the realities of economic means, then what can the state leverage against capitalism?  As I have argued in previous posts, the only place capitalism is vulnerable is the bottom line.  You must hold some power over profits, have some way to damage profits, if you want to bring capitalism to heel.  Yet it is exactly when the state interferes in profit-making, that capital flees to a new jurisdiction.  What can possibly halt capital flight?  The answer, it seems to me, is stability.  Despite all the rhetoric, lots of capital (hardly all, but hardly an insignificant amount either) hates risk.  There wouldn’t be so much money invested in US Treasury bonds (at a paltry return) if safety wasn’t the highest priority for lots of capital.  What the rich Western countries have to offer capital are stable political and social orders, along with proximity to rich consumers.  This isn’t a pretty answer.  It means the West has a market advantage because of its contrast to more turbulent and more impoverished parts of the world.  But, at this moment at least, the West needs to trade on this strength by making capital pay for the privilege of investment in the West.  It just means the cost of doing business in the West will be higher (because of taxes and regulations) and, in addition (this is where the state needs to start throwing its weight around) there will also be a cost exacted for whatever functions capital exports in order to get around those higher costs.  Call this protectionism or whatever you will.  But—just as we need a transaction tax to raise the costs to financial capital of its various speculative moves—we need a “flight tax” that does not allow capital to move seamlessly across borders.  And if a corporation retaliates by moving wholesale to the Bahamas, then there needs to be an “access tax” to gain entry to the US or UK or French market.  These things are not impossible.  States have been way too timid in the face of capital flight—especially when those states have jurisdiction over very large markets and enjoy political and social stability.

Enough for today.  Plenty to chew on and follow up about.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s